Attached files
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| 8-K - FIRST QUARTER 2013 8-K - CITIZENS FINANCIAL SERVICES INC | firstquarter2013.htm |
| Contact: Kathleen Campbell, Marketing Director | First Citizens Community Bank |
| 570-662-0422 | 15 S. Main Street |
| 570-662-8512 (fax) | Mansfield, PA 16933 |
Citizens Financial Services, Inc. Reports First quarter 2013 Earnings
MANSFIELD, PENNSYLVANIA— April 23, 2013 – Citizens Financial Services, Inc. (OTC BB: CZFS), parent company of First Citizens Community Bank, has released its unaudited financial performance for the three months ended March 31, 2013.
For the three months ended March 31, 2013, net income totaled $3,287,000 which compares to net income of $3,449,000 for the first quarter of 2012. This represents a decrease of $162,000, or 4.7%. Earnings per share of $1.14 for the first quarter compares to $1.18 last year. Annualized return on equity for the comparable periods was 15.22% and 17.76%, while return on assets was 1.50% and 1.57%, respectively.
CEO and President Randall E. Black stated, “Our financial performance remains outstanding, even with the anticipated decrease in our margin given the current and persistent interest rate environment. Our results also reflect the ongoing implementation of our strategic plan which includes investment in technology and human resources that will result in the long-term success of our company”.
Net interest income, before the provision for loan losses, decreased from $7,558,000 for the three months ended March 31, 2012 to $7,313,000 in 2013. The decrease of $245,000, or 3.2%, is reflective of slightly decreased margins. On a tax equivalent basis, net interest margin decreased from 4.02% last year to 3.90% this year. “Even though we have added interest earning assets from a year ago, the new assets are added at lower rates than those assets that are maturing or re-pricing. The tax equivalent yields on interest earning assets decreased from 5.04% for the first quarter of 2012 to 4.72% this year. We have been able to offset this by reducing our cost of funds, which has decreased from 1.19% last year to .99% this year. We continue to expect that 2013 will bring challenges as the prolonged low interest rate environment persists”, added Mr. Black.
At March 31, 2013, total assets were $883 million, which was an increase of $600,000 from total assets of $882.4 million at December 31, 2012. From year-end 2012, the investment portfolio has decreased $10.1 million to $300.2 million as of March 31, 2013. Net loans of $496.8 million as of the end of March have increased $1.1 million compared to December 31, 2012. Fixed rate residential mortgages that were sold on the secondary market totaled $9 million for the first quarter of 2013 compared to $4.5 million for the comparable period in 2012.
Credit quality continues to improve and remains better than peer. As of March 31, 2013, non-performing assets totaled $8.9 million and represented 1.77% of loans. This compares to 1.83% as of December 31, 2012. Through March 2013, the provision for loan loss was $150,000 compared to $105,000 recorded last year. Annualized net charge-offs as a percent of average loans remains very low at .01%.
Stockholders’ equity totaled $90.8 million at March 31, 2013, which is an increase of $1.3 million or 1.5% from December 31, 2012. A cash dividend of $.285 per share was paid on March 29, 2013 to shareholders of record on March 22, 2013. Coupled with the first quarter 2013 accelerated dividend payment of $.38 per share paid on December 31, 2012, the dividend of $.285 per share represents an attractive dividend yield. The Board of Directors accelerated the first quarter dividend due to the significant issues in Washington regarding the very complex fiscal cliff tax issues at that time and its intent was to benefit shareholders that may have been affected by the potential tax increase on dividends during 2013.
Citizens Financial Services, Inc. has over 1,500 shareholders, the majority of whom reside in Potter, Tioga, and Bradford Counties, Pennsylvania and Allegany County, New York, where their 17 full-service offices and 2 loan production offices are located.
Note: This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to various factors. These factors include operating, legal and regulatory risks; changing economic and competitive conditions and other risks and uncertainties.
1
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CITIZENS FINANCIAL SERVICES, INC.
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CONSOLIDATED BALANCE SHEET
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(UNAUDITED)
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March 31
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December 31
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March 31
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(in thousands except share data)
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2013
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2012
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2012
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ASSETS:
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Cash and due from banks:
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Noninterest-bearing
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$ 6,162
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$ 12,307
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$ 11,835
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Interest-bearing
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30,952
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14,026
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2
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Total cash and cash equivalents
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37,114
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26,333
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11,837
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Available-for-sale securities
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300,176
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310,252
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362,148
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Loans held for sale
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-
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1,458
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-
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Loans (net of allowance for loan losses: $6,928 at March 31, 2013;
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$6,784 at December 31, 2012 and $6,545 at March 31, 2012)
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496,795
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495,679
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484,747
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Premises and equipment
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11,446
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11,521
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11,582
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Accrued interest receivable
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3,840
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3,816
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4,305
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Goodwill
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10,256
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10,256
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10,256
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Bank owned life insurance
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14,301
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14,177
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13,794
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Other assets
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9,022
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8,935
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10,757
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TOTAL ASSETS
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$ 882,950
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$ 882,427
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$ 909,426
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LIABILITIES:
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Deposits:
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Noninterest-bearing
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$ 85,330
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$ 89,494
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$ 89,806
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Interest-bearing
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651,591
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647,602
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653,020
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Total deposits
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736,921
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737,096
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742,826
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Borrowed funds
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45,556
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46,126
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72,768
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Accrued interest payable
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1,039
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1,143
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1,320
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Other liabilities
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8,664
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8,587
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8,736
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TOTAL LIABILITIES
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792,180
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792,952
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825,650
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STOCKHOLDERS' EQUITY:
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Preferred Stock $1.00 par value; authorized
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3,000,000 shares at March 31, 2013, December 31, 2012 and March 31, 2012;
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none issued in 2013 or 2012
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-
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-
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-
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Common stock
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$1.00 par value; authorized 15,000,000 shares at March 31, 2013, December 31, 2012 and
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March 31, 2012; issued 3,161,324 shares at March 31, 2013 and December 31, 2012;
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3,132,866 shares at March 31, 2012
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3,161
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3,161
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3,133
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Additional paid-in capital
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16,534
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16,468
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15,445
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Retained earnings
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74,276
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71,813
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65,931
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Accumulated other comprehensive income
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3,627
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4,631
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4,612
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Treasury stock, at cost: 267,729 shares at March 31, 2013; 262,921 shares at
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December 31, 2012 and 232,433 shares at March 31, 2012
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(6,828)
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(6,598)
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(5,345)
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TOTAL STOCKHOLDERS' EQUITY
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90,770
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89,475
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83,776
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TOTAL LIABILITIES AND
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STOCKHOLDERS' EQUITY
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$ 882,950
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$ 882,427
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$ 909,426
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The accompanying notes are an integral part of these unaudited consolidated financial statements.
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2
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CITIZENS FINANCIAL SERVICES, INC.
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CONSOLIDATED STATEMENT OF INCOME
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(UNAUDITED)
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Three Months Ended
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March 31,
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(in thousands, except per share data)
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2013
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2012
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INTEREST INCOME:
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Interest and fees on loans
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$ 7,137
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$ 7,465
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Interest-bearing deposits with banks
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10
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5
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Investment securities:
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Taxable
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963
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1,197
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Nontaxable
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869
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954
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Dividends
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20
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16
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TOTAL INTEREST INCOME
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8,999
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9,637
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INTEREST EXPENSE:
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Deposits
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1,328
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1,666
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Borrowed funds
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358
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413
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TOTAL INTEREST EXPENSE
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1,686
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2,079
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NET INTEREST INCOME
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7,313
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7,558
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Provision for loan losses
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150
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105
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NET INTEREST INCOME AFTER
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PROVISION FOR LOAN LOSSES
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7,163
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7,453
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NON-INTEREST INCOME:
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Service charges
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1,024
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1,078
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Trust
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201
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173
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Brokerage and insurance
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92
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150
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Gains on loans sold
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111
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54
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Investment securities gains, net
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196
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108
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Earnings on bank owned life insurance
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124
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124
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Other
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104
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129
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TOTAL NON-INTEREST INCOME
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1,852
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1,816
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NON-INTEREST EXPENSES:
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Salaries and employee benefits
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2,805
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2,753
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Occupancy
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342
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310
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Furniture and equipment
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102
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106
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Professional fees
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229
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268
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FDIC insurance
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112
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123
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Pennsylvania shares tax
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183
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166
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Other
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1,049
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1,102
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TOTAL NON-INTEREST EXPENSES
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4,822
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4,828
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Income before provision for income taxes
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4,193
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4,441
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Provision for income taxes
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906
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992
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NET INCOME
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$ 3,287
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$ 3,449
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PER COMMON SHARE DATA:
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Net Income - Basic
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$ 1.14
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$ 1.18
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Net Income - Diluted
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$ 1.14
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$ 1.18
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Cash Dividends Paid
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$ 0.285
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$ 0.295
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Number of shares used in computation - basic
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2,889,523
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2,924,268
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Number of shares used in computation - diluted
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2,889,972
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2,924,433
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3
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Financial Highlights
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Three Months Ended
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March 31
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2013
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2012
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Performance Ratios and Share Data:
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Return on average assets (annualized)
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1.50%
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1.57%
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Return on average equity (annualized)
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15.22%
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17.76%
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Net interest margin (tax equivalent)
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3.90%
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4.02%
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Cash dividends paid per share
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$ 0.285
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$ 0.295
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Earnings per share - basic
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$ 1.14
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$ 1.18
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Earnings per share - diluted
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$ 1.14
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$ 1.18
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Number of shares used in computation - basic
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2,889,523
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2,924,268
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Number of shares used in computation - diluted
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2,889,972
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2,924,433
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Balance Sheet Highlights (dollars in thousands):
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March 31, 2013
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December 31, 2012
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March 31, 2012
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Assets
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$ 882,950
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$ 882,427
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$ 909,426
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Investment securities:
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Available for sale
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300,176
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310,252
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362,148
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Loans (net of unearned income)
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503,723
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502,463
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491,292
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Allowance for loan losses
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6,928
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6,784
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6,545
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Deposits
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736,921
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737,096
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742,826
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Stockholders' Equity
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90,770
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89,475
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83,776
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Non-performing assets
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8,911
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9,189
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10,422
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Non-performing assets to total loans
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1.77%
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1.83%
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2.12%
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Annualized net charge-offs to total loans
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0.01%
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0.02%
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0.04%
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Average Leverage Ratio
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9.96%
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9.70%
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9.00%
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Common shares outstanding
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2,893,594
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2,898,402
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2,900,433
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Book value per share
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$ 30.12
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$ 29.27
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$ 27.29
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4